Here's The TRUTH About The Collapse In US Labor Force Participation

Following the release of the jobs report today, there was a lot
of hubbub about the decline in labor force participation, and how
the unemployment rate would look a lot worse if there hadn't been
a rather big exodus of workers leaving the labor market
completely.

And this is true.

BUT! This idea that things are so bad, and so everyone is just
leaving the workforce to sit on their couch is a fantasy. The
fact of the matter is that we're just getting older, and as
countries get older, people stop working. In fact, rather than
seeing our labor force participation as being really low, we
might be better off thinking of labor force participation as
having been abnormally high previously.

Here's a look at US labor force participation (red line)
vs. Germany, Sweden, Japan, the UK, and Italy, which offers a
decent cross-section of highly developed nations. The fact of the
matter is that up until recently the US was way higher than most
of these other countries. Now we're coming closer to the average
of other big countries.

Note that Germany (the blue line) is still way lower than ours.

Bottom line: We're getting older and becoming more normal in this
regard.